GenNext taking driver’s seat at Hamara Bajaj

Are senior Bajajs — Rahul, Niraj and Madhur — slowly exiting their holdings in Bajaj Auto and handing over reins to the second generation family members — Rajiv, Sanjiv, Nirav, Kirti and Sunaina among others? Stock analysts say Rahul Bajaj, who had already stepped down from operational decision-making, is now in the process of transferring his shareholdings to the next generation.

The transfer of shares may take as long as five years, say analysts. In last one-month alone over 23.1 lakh shares of Bajaj Auto were acquired by the second-generation family members. Chairman of Bajaj Auto Rahul Bajaj told Financial Chronicle, “It is in the private domain. The share transfer is for personal reasons. We, as promoters of the company, would continue to do so within Sebi’s guidelines.”

“Promoters sell shares for many reasons. The transaction is miniscule compared with the total share capital of the company,” said Bajaj Finserv MD and Bajaj Auto executive director Sanjiv Bajaj.

“This might be a distribution of stakes among sons and daughters of Rahul, Niraj and Madhur. All the senior Bajaj’s are moving towards retirement and all their children have proved themselves. They can run the business better than their parents. So as part of the long term strategy, the seniors will completely move out in a prudent way,” said Deepak Jain, assistant vice-president at Sharekhan.

Jain said the cash could be deployed in philanthropy. And since the sale of shares is to family members who are part of the promoter group, it will not attract capital gains tax, he added. Pankaj Pandey, head of research at ICICI Direct said, “Rahul Bajaj had given operational control to his sons and now it makes sense if he is transferring his shares too.” The transaction of over 23.1 lakh shares, last month, among the members of the promoter group of Bajaj Auto gave over Rs 177 crore to Rahul Bajaj and his wife — Ruparani Bajaj combined, Rs 85 crore to Madhur Bajaj (brother of Rahul Bajaj) and over Rs 67 crore to Niraj Bajaj (brother of Rahul Bajaj)

Madhur, who held 0.71 per cent stake in Bajaj Auto in his personal name sold 0.19 per cent stake. While Niraj, who helds 0.92 per cent stake in his own name, sold 0.14 per cent stake.

Vineet Hetamasaria, head of research at Pinc Research said, “This could be part of some arrangement between the family members not known to the market. But in three to four months, Bajaj Auto might announce change in Bajaj family holding structure in the company.” Promoters of Bajaj Auto held 50.02 per cent stakes in the company as of June 2011. Shares of the company fell by 1.2 per cent to Rs 1,515.9 per share on the Bombay Stock Exchange on Monday.